Citigroup's Shadow Emperor

Published: July 20, 2003

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Mr. Paley famously returned to CBS as chairman in 1986, when he was 85, after the dismissal of his third successor, Thomas Wyman. ITT's board had to order Mr. Geneen, its chairman, not to attend management meetings unless he was invited by Lyman Hamilton, who succeeded him as chief executive and began dismantling the industrial conglomerate that Mr. Geneen had assembled.

Mr. Sonnenfeld noted the involvement of Franklin A. Thomas in Citigroup's drawn-out drama. Mr. Thomas had been a director of CBS during ''its incredibly troubled succession history'' in the 1980's, and was chairman of the committee of Citigroup directors who were charged with planning for life after Mr. Weill, Mr. Sonnenfeld said.

On Wednesday, when Mr. Weill announced the long-anticipated plan, Citigroup officials said Mr. Thomas was on a plane to South Africa and unavailable for comment. Another committee member, Richard D. Parsons, the chairman and chief executive of AOL Time Warner, said it would have been a mistake to have Mr. Weill walk away immediately.

Mr. Sonnenfeld said Mr. Weill was trying to go out as yet another type -- an ambassador -- as Thomas J. Watson Jr. did when he stepped down as I.B.M.'s chairman and chief executive in 1971 . But Mr. Sonnenfeld said he was uncertain whether Mr. Weill, who has not always worked well with other strong-willed executives, would be able to switch roles so completely.

''When a monarchic type tries to play the ambassador, you often wind up with a general,'' Mr. Sonnenfeld said. Generals, he said, tend to ''second-guess and bring down their successors.'' He added that an acknowledgment by Mr. Weill last week -- that he had suffered withdrawal pains when he did not receive his daily update on the previous Friday -- was a ''chilling reminder that he is very tempted to get drawn back in.''

Mr. Sonnenfeld said, though, that he disagreed with Ms. Minow's view that, as a rule, retiring chief executives should make a clean break. He said there have been plenty of successful transitions by chief executives who have stayed close to their companies. Among those he cited were Bill Gates at Microsoft, Herbert D. Kelleher at Southwest Airlines and Andrew S. Grove at Intel -- all of whom had reputations as hands-on, domineering executives.

Their successors ''never complained about an intrusive, meddlesome presence that somehow has a chilling effect'' on their ability to manage, Mr. Sonnenfeld said.

All told, more than 250 big public companies have chairmen who formerly held the chief executive's title, said Paul Hodgson, senior research associate at the Corporate Library.

Two months ago, Charles R. Schwab, the founder and chairman of the Charles Schwab brokerage firm, gave up the title of co-chief executive after five years of sharing it with David Pottruck. But Mr. Schwab is an active chairman who continues to attend meetings of the executive management committee, said Greg Gable, a spokesman at Schwab's headquarters in San Francisco.

''Ours is a unique situation in that they worked together as co-C.E.O.'s for five years,'' Mr. Gable said. ''It's a highly productive relationship.''

MR. WEILL'S own experiment as a co-chief executive ended abruptly. John S. Reed, who was running Citicorp when it merged with Mr. Weill's Travelers Group in 1998, lost the power struggle within 18 months.

But Mr. Reed was a relative stranger to Mr. Weill -- unlike Mr. Prince, a lawyer who has been in Mr. Weill's inner circle for 17 years. In interviews with reporters and analysts last week, Mr. Prince said he did not intend to make any radical changes to Citigroup, and Mr. Weill repeatedly expressed his affection for Mr. Prince.

While some critics are skeptical that Mr. Weill will uphold his pledge to step back by the end of 2003 and then walk away altogether after Citigroup's annual meeting in the spring of 2006, Mr. Sonnenfeld said he saw a glimmer of hope in Mr. Weill's philanthropic activities. The typical corporate monarch has no other passions, Mr. Sonnenfeld said, but Mr. Weill devotes much time and energy to Carnegie Hall and the Weill Medical College of Cornell University. Indeed, Mr. Weill is already trying to expand his role in New York society through the proposed merger of Carnegie Hall and the New York Philharmonic.

But that's not to say he'll never, ever be back. ''A violinist can pack up his instrument and take it with him,'' Mr. Sonnenfeld said. ''But Sandy is a conductor. Citigroup is obviously his institution. Should it become imperiled, it will be hard for him to resist the urge to save it.''

Photos: Charles O. Prince is set to become the chief executive of Citigroup at the end of the year, but can he override the influence of Sanford I. Weill, left, who will remain as chairman? (Nicole Bengiveno/The New York Times [Prince], Bloomberg News [Weill]; Illustration, The New York Times)(pg. 1); Thomas H. Wyman, the chief of CBS, left, and William S. Paley, the chairman, in 1980. Mr. Paley departed in 1983 but returned in 1986. (CBS); G. Richard Thoman, left, was hired away from I.B.M. in 1997 to lead Xerox, but Paul A. Allaire later reinstated himself as the company's chief. (Photographs by Associated Press); Andrew S. Grove, right, who is the chairman of Intel, the chip maker, relinquished his duties as chief executive to Craig R. Barrett in 1998. (Associated Press); Bill Gates, left, has remained as chairman and chief software architect of Microsoft while Steven A. Ballmer serves as the chief executive. (Agence France-Presse)(pg. 10)